Shipping losses fell in 2013, with just 94 losses of ships of more than 100 gross tons reported worldwide, compared to 117 in 2012. That was only the second time losses were below 100 in a dozen years, according to the insurer Allianz Global Corporate & Specialty.
The company, issuing its Safety and Shipping Review 2014
, said the industry faces new challenges, including an increase in pirate attacks in West Africa and Indonesia, and risks posed by"mega ships," Arctic shipping and alternative fuels.
Tim Donney, global head of marine risk consulting, said, “While the long-term downward trend in shipping losses is encouraging, there is more work to be done to improve the overall safety of these vessels as well as their cargo, crew and passengers, especially in Asian waters."
Asia saw the highest number of total losses, with 18 lost in South China, Indo China, Indonesia and the Philippines region, and 17 in the seas around Japan, Korea and North China.
“We have to ask how some Asian ship operators measure safety and
quality, particularly when speaking about domestic trade shipping in
Southeast Asia,” said Capt. Jarek Klimczak, senior marine risk
consultant at AGCS. “The understanding of quality and standards can
sometimes appear 50 years behind Europe -- maybe even more.”
The company said, "Asia remains a hotspot for passenger shipping losses, especially for smaller passenger vessels and ferries as demonstrated by the sinking of the ferry St. Thomas of Aquinas
as a result of a collision with another vessel off Cebu in the Philippines in August 2013, with the loss of at least 116 lives.
"Around the world, more than a third of the vessels lost were cargo ships, with fishery and bulk carriers the only other type of vessels to record double-digit losses," said Allianz. "The total loss of two bulk carriers in Asian waters in 2013, Harita Bauxite
and Trans Summer
, highlighted the importance of proper cargo handling and stowage of bulk cargoes. AGCS experts believe high moisture content and subsequent liquidization, leading to free flowing instabilization of the cargo to be the primary cause of the accidents.
"The most common cause of losses in the past year was foundering (sinking or submerging), often driven by heavy weather, accounting for almost 75 percent of all losses, which was a significant increase from both 2012 (47 percent) and the previous 10-year average (44 percent)."
Allianz said that for the first time, it was reporting not only total losses, but also the total number of shipping casualties by region.
The East Mediterranean and Black Sea region is shown to be a casualty hotspot, responsible for 464 casualties out of a worldwide total of 2,596 during 2013, including the year’s oldest ship (a total loss): the 108-year-old Hantallar,
which grounded off Tekirdag, Turkey.
In 2013, piracy attacks declined 11 percent to 264 reported incidents worldwide, according to International Maritime Bureau.
Allianz noted that 106 of these occurred in Indonesia, which has seen a 700-percent increase in attacks since 2009.
"Most of these attacks remain low-level opportunistic thefts carried out by small bands of individuals, but one-third of incidents in these waters were reported in the last quarter of 2013, and there is potential for such attacks to escalate into a more organized piracy model unless they are controlled."
The German insurer noted an emerging piracy hotspot with more organized crime is the Gulf of Guinea, with 48 incidents in 2013, while piracy attacks in Somalia have declined dramatically, with only seven incidents in 2013, compared with 160 attacks in 2011. The report suggests the piracy model could be broken in Somalia in a couple of years if naval patrols continue.
Emerging risks identified in the 2014 report include the growing size of vessels. Maersk launched several 18,000-TEU ships last year and AGCS estimates that with capacity growing by around 30 percent every four to five years, "the arrival of 24,000-TEU carriers can be anticipated around 2018."
"Claims arising out of maritime emergencies of these ‘mega ships’ can be huge. For example, just think of the business interruption of ports and terminals if an accident was to block the entrance,” said Sven Gerhard, global product leader, hull and marine liabilities, AGCS. “In addition, salvage might require unprecedented efforts and complex operations -- in some cases, it may take many months, or possibly a year or longer, to remove all the containers, particularly if the accident were to happen in a remote location. The large loss potential has increased for events which are not extraordinary on these big ships. And these are unchartered waters for salvors.”
Noting that use of liquefied natural gas to power ships is expected to dramatically increase by 2020, Allianz said there are safety concerns, "as the industry will see the rise of ports that have never previously handled LNG providing bunkering stations on dock."
“We need to ask what risks LNG-fueled ships will present to the industry. The concern is storing the LNG as fuel and handling it onboard. LNG expertise is not easily available -- there needs to be a change in mindset and training,” said Rahul Khanna, senior risk consultant for marine at AGCS.
AGCS also noted that shipping casualties in the Arctic Circle waters have increased to an average of 45 per year during 2009-2013, up from only seven during 2002-2007. Damage to machinery, it said, caused a third of these incidents, higher than the average elsewhere, reflecting the harsher operating environment.